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does weeki watchie still have the weekie watchie girls that water ski on the front of the brochure I would see all the time when I was a little kid visiting central florida ?
does weeki watchie still have the weekie watchie girls that water ski on the front of the brochure I would see all the time when I was a little kid visiting central florida ?
Truly the best captured memory of the 40 year old Fannie/Freddie assisted and otherwise government subsidized (tax incentives, etc) real estate ponzi scheme.
Truly the best captured memory of the 40 year old Fannie/Freddie assisted and otherwise government subsidized (tax incentives, etc) real estate ponzi scheme.
Maybe you have some other information that I couldn't come up with.
Here is what I read on it.
It doesn't mention Fannie or Freddie.
"Even as early as 1961 scientists were concerned that the Salton Sea's days were numbered due to increasing salinity levels. The fish populations that were introduced would not be able to survive, creating an environmental and economic catsatrophe. Nearly a decede later, two tropical storms flooded the struggling seaside resorts, signaling the end of the dream. The Salton Sea was now an environmental disaster, with skyrocketing salinity levels, devastating algae blooms, and a cocktail of agricultural runoff that mixed into the water from the many farms of the Imperial Valley. Even today there still isn't an easy answer to the question of saving the sea, as many argue not only over an environmental solution, but over the fate of the water itself. There have been outbreaks of botulism that threaten the fish and bird populations, with huge die-offs occurring in the first half of the decade.
Salton City is perhaps the best example of the dream destroyed - miles of cracked pavement wind and stretch through the empty desert, street signs rust at vacant intersections, and the desert has reclaimed the green of the golf course. The infrastructure for a great city was built, yet homes were never constructed and families never came. Is the Holly Corporation partly to blame for squandering the resources of investors? Was too much promised and not enough delivered? Some would argue that Holly bailed from the Salton City Project when they sensed it wouldn't be as profitable as anticipated, leaving investors in the lurch and a city half-built. The final death knell came in 2000, when the magnificant Yacht Club was razed."
Maybe you have some other information that I couldn't come up with.
Here is what I read on it.
It doesn't mention Fannie or Freddie.
"Even as early as 1961 scientists were concerned that the Salton Sea's days were numbered due to increasing salinity levels. The fish populations that were introduced would not be able to survive, creating an environmental and economic catsatrophe. Nearly a decede later, two tropical storms flooded the struggling seaside resorts, signaling the end of the dream. The Salton Sea was now an environmental disaster, with skyrocketing salinity levels, devastating algae blooms, and a cocktail of agricultural runoff that mixed into the water from the many farms of the Imperial Valley. Even today there still isn't an easy answer to the question of saving the sea, as many argue not only over an environmental solution, but over the fate of the water itself. There have been outbreaks of botulism that threaten the fish and bird populations, with huge die-offs occurring in the first half of the decade.
Salton City is perhaps the best example of the dream destroyed - miles of cracked pavement wind and stretch through the empty desert, street signs rust at vacant intersections, and the desert has reclaimed the green of the golf course. The infrastructure for a great city was built, yet homes were never constructed and families never came. Is the Holly Corporation partly to blame for squandering the resources of investors? Was too much promised and not enough delivered? Some would argue that Holly bailed from the Salton City Project when they sensed it wouldn't be as profitable as anticipated, leaving investors in the lurch and a city half-built. The final death knell came in 2000, when the magnificant Yacht Club was razed."
The reasons for the Salton Sea area's collapse are simply incidental. More to the point, the area was about to get a resurgence b/c of the frenzied ponzi scheme happening near LA. People were considering moving to that stinkhole because real estate was artificially inflated closer to work. Again, Fannie/Freddie hard at work passing off crap CMOs as AAA rated.
IMO, housing prices would fall, and the percentage of homeownership in this country would go back to historic levels, maybe 60% - 64%. Banks would have to carry their own portfolio, as mine does. The mortgage broker and title business would shrink even more than it has done.
After that, say 3-5 years down the road, something interesting might start to happen. As prices fall, the inventory begins to be bought up, by people who could not have afforded the home at the original hyper-inflated price. The banks that are left are stronger and more prone to scrutinize the loan application for quality before granting it. People begin to understand that they have to *gasp* actually save up for a down payment. People who can't do this remain renters, which after all has many advantages.
You know, I don't see all this as a recipe for the end of the world. Maybe a slightly lower national home ownership rate is an acceptable tradeoff for a higher savings rate, a stronger dollar, and -- maybe -- less federal debt.
If only.
The National Housing Act of 1934 as amended, spawned endless laws , Government agencies, deposit and mortgage insurers, sponsors and guarantees to promote and support the American Dream and the businesses and jobs that support it. Taxpayers ( including direct and indirect beneficiaries of these programs) have always funded the necessary bail outs as has been required, over time.
Imagine what if the U.S. returned to a pre 1934 National Housing Act way of life, where the Government ( taxpayers) did not bolster, support, assist, insure, guarantee banking institutions or their investments in mortgages. Who but the wealthy, able to pay cash, could afford a home? If the concept of a mortgage survived, it would be impossible to offer a fixed rate mortgage, given interest rate risks and better opportunities for investment.
Would the people of Bedford Falls empty out thier sugar bowls to bail George Bailey out when he ran into a snag in 2009?
The National Housing Act of 1934 as amended, spawned endless laws , Government agencies, deposit and mortgage insurers, sponsors and guarantees to promote and support the American Dream and the businesses and jobs that support it. Taxpayers ( including direct and indirect beneficiaries of these programs) have always funded the necessary bail outs as has been required, over time.
Imagine what if the U.S. returned to a pre 1934 National Housing Act way of life, where the Government ( taxpayers) did not bolster, support, assist, insure, guarantee banking institutions or their investments in mortgages. Who but the wealthy, able to pay cash, could afford a home? If the concept of a mortgage survived, it would be impossible to offer a fixed rate mortgage, given interest rate risks and better opportunities for investment.
Would the people of Bedford Falls empty out thier sugar bowls to bail George Bailey out when he ran into a snag?
The New Deal was a long, long time ago, and the programs that arose then are all getting pretty old and creaky. All the Western democracies are having to scale back their social welfare spending, and the GSEs should not be exempt from that. In fact, according to the Economist, the GSEs were "guaranteeing" mortgages that were already better than average in quality, which defeats the purpose of the system. There's also something inherently unfair about using taxpayer dollars to subsidize the GSEs risk, which then benefits private shareholders, primarily. Or at least it did when the bubble was inflating.
And that's the rub. The GSEs were part of a system that helped inflate the bubble far beyond any rational bounds. And the reply always was "but if we don't have the GSEs, no one will be able to buy."
But that's not true. We have created a system which gives banks disincentives to hold portfolio loans. We have also provided many disincentives for people to save. Scale back the GSEs, force people to save the traditional 20% down, and let prices drop to levels the market will really bear. This will lower mortgage costs overall and put responsible people into homeownership. The alternative is to keep a diseased system going, putting people into homes who have an incentive to "walk away." Which is extremely damaging to communities as a whole.
Here's another way to think of it. In a halfway healthy market, capital will flow to business opportunities where there is money to be made. So if mortgages are at all profitable, there will be capital to lend. But if there is no money to be made, why on earth should taxpayer dollars be used to "guarantee" a bad investment, for the benefit of private shareholders?
The whole argument of "needing" the GSEs hinges on the unspoken assumption that America is better off if we get the maximum number of people into homeownership. So that's what we did, and the results are a total disaster. Renting is not some sort of societal evil, it's just a choice. Better to have more renters than a lot of empty, deteriorating neighborhoods full of foreclosed homes.
Last edited by scone; 08-08-2008 at 10:53 AM..
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